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Med BioGene Amends Licensing Deal with Precision; Updates Litigation Status

NEW YORK (GenomeWeb News) – Med BioGene today announced it has amended its commercialization agreement with Precision Therapeutics for Med Bio's LungExpress Dx test.

The Vancouver, British Columbia-based company also provided an update on its litigation against Signal Genetics and Respira Health.

Last year Med Bio and Precision inked a deal to commercialize the LungExpress Dx test, providing Med Bio licensing fees and research reimbursement of $2.3 million. Med Bio was also eligible for up to $1 million upon achieving certain milestones, all of which would be credited against future royalties that may be owed to Med Bio by Precision.

Today, Med Bio said that the firms have amended the milestone payments, among other things. Precision will now pay Med Bio a total of $500,000 following the commercial launch of LungExpress Dx. After net revenues reach $5 million, Precision will pay Med Bio another $500,000. Med Bio also will receive royalty payments in the high single digits based on a percentage of Precision's future net revenues related to the commercialization of the test.

LungExpress Dx is a gene expression-based test for the identification of patients with early-stage non-small-cell lung cancer who, following surgical removal of their tumor, are at higher and lower risks of mortality.

"By restructuring the milestone payments in our commercialization agreement, we expect to extend [Med Bio's] cash runway following the commercialization of LungExpress Dx to allow us the opportunity to demonstrate increasing clinical and commercial success of our test," Erinn Broshko, Executive Chairman of Med BioGene, said in a statement. "As a result of our focused burn rate, we believe that [the company] currently has sufficient cash resources to continue with operations until approximately the first quarter of 2014.

"If Precision commercializes LungExpress Dx around the expected timeframe then, with receipt of the $500,000 in milestone payments from Precision relating to commercial launch, we believe that [Med Bio] will have sufficient cash resources to fund operations until approximately the third quarter of 2015," Broshko said.

Med Bio also updated the status of its legal fight with Signal Genetics and Respira Health.

Signal initially accused Med Bio last year of a breach of agreement, violation of a confidentiality agreement, and misuse of proprietary information, among other things. New York City-based Signal said that its suit stems from Med BioGene allegedly breaching an agreement to provide Signal with "a not less than 10-year exclusive, worldwide license to use [the] LungExpress Dx technology."

In an amended complaint Signal added that Med Biogene used "a false promise of granting a license to Signal to induce Signal to provide Med BioGene with confidential information, which Med BioGene then provided to Precision Therapeutics."

Today, Med Bio said that it continues to believe the litigation is "frivolous, vexatious, and entirely without merit and is defending the lawsuit vigorously." On Aug. 24, it filed a motion for partial summary judgment to dismiss the claims by Signal and Respira of lost profits, as well as cause of action for negligent misrepresentation, unfair competition, and unjust enrichment. A hearing on the motion has not yet been scheduled.